Making the most of our money: Why Canada and Ontario should invest unclaimed assets for social good

The Bank of Canada holds $626 million in unclaimed assets, a sum that grew by $49 million in 2015. An asset that remains unclaimed will eventually turn into national revenue, but until then it is held in low-yield investments.

British Columbia, Alberta and Québec owners can claim another $429 million in provincially-regulated assets. A third sum is scattered across insurers, credit unions and other holders in the rest of the provinces and territories, in which the law leaves unclaimed assets where their owners forgot them.

Small deals and high transaction costs continue to stymie investment in Canada’s relatively immature impact investment market. Charities, non-profits and social enterprises struggle to attract the funds they need to maximize their impact. To solve the same challenge, the United Kingdom created Big Society Capital, a capital wholesaler. Big Society invests unclaimed assets in impact funds, which then invest in U.K. charities and social enterprises. As of 2015, Big Society Capital had signed deals worth £261 million (CDN$480 million) and leveraged another £326 million ($599 million)* to, among other things, help homeless people into stable housing, train workers with barriers to employment, and strengthen families at risk of losing their children.

Canada can learn from the U.K.’s example. The federal government should consider a policy change to allow a portion of the unclaimed assets held by the Bank of Canada to be invested for impact. A careful strategy would safeguard the Bank’s ability to return claimed balances and would ensure the contribution of unclaimed assets to the federal budget does not diminish.

Of the provinces and territories, Ontario has the most to gain from regulating and investing its unclaimed assets. It does not have a law governing unclaimed assets, although it considered introducing one in 2012-2013. While no one knows the precise amount, Ontario’s holders very likely have at least $100 million in unclaimed assets. Ontario has an opportunity to advance legislation that would both reunite owners with their assets and invest assets that remain unclaimed in the public benefit.

Governments must protect unclaimed assets for owners; however, while they remain unclaimed, these assets could be put to work. They can do too much good to stay in the vault.